-X
TO
BE
ILED
UNDER
E L
MEMORANDUM
RDER
18-CR-204-4
NGG)
VMS)
UNITED ST TES
ISTRICT
COURTE STERN
ISTRICT
OF
NEW
ORK
UNITED STATES
OF
AMERICA,
-against-
K THY
USSELL,
Defendant.
X
NICHOLAS
G.
GARAUFIS,
nited
States District
Judge.
Before
the court
s
Defendant
Kathy
ussell's
motion
to
dismiss the
Second
SupersedingIndictment,
which
charges her
and
four
others
with
participation
in
a
acketeering
conspiracy
arising
from
their
involvement
in
a
elf-help
organization
called
Nxivm
Second
SupersedingIndictment
Dkt.
430)
13-15).
(Kathy
Russell
Mot.
o
Dismiss
( Mot )
Dkt.
70).)
Russell
alleges
that
the
Government
i)
made
isleading statements to Russell
that
ulled
her
into
partially
waiving
her
Fifth
Amendment
ights
and
testifying
before the
grand jury
and
ii)
misrepresented
the
scope
of
er
Fifth
Amendment
ights.
(Kathy
Russell
Mem.
n
Supp. of
Mot.
to
Dismiss
( Mem. )
Dkt.
283);
Kathy
ussell
First
Supplemental
Mem.
n
Supp.
f
ot.
o
Dismiss
( First
Suppl.
Mem. )
Dkt.
63));
Kathy
ussell
Second
Supplemental
Mem.
n
Supp.
of ot.
o
Dismiss Second
Suppl.
Mem. )
Dkt.
498);
Kathy
ussell
Third Supplemental
Mem.
n
Supp.
of ot.
o
Dismiss
Third Suppl.
Mem. )
Dkt.
17).)
In
the
altemative,
she
asks the court
to (i)
compel
he
Government
o
provide
various
discovery
and
ii)
conduct
an
evidentiary
hearing regarding
whether,
t
the
time
of
ussell's
grand jury
testimony, he
Government
had
evidence
making
her
chargeable
with
a
rime.
For
the
following
reasons,
the
court
DENIES
er
motion
without
an
evidentiary
hearing.
Case 1:18-cr-00204-NGG-VMS Document 528 Filed 04/12/19 Page 1 of 20 PageID #: 5560
I.
CKGROUIND
A
Russell's
Grand
Jury
Testimony
On
r about
pril
25,2018,
ix
days
fter
the
Government
ndicted
Keith
Raniere
and
Allison
Mack,
athy
ussell
received
a
rand
jury
subpoena
summoning
her to
testify
on
May
10,2018.
(May
10,2018 Subpoena
Dkt.
84-1).)
The
ubpoena
was
lipped
under
her
apartment
door and
did
not
contain
any
attachments,
uch as
a
etter
advising
her
hat
she
was
target
or
subject
of
he
Government's
nvestigation
or
an
advice
of
ights
orm.
(Mem.
t
2.)
Other grand jury
witnesses
in
his
matter
were
informed
that
they
were
a
subject
before they
testified.^
(Justine
Harris
Decl.
Harris
DecL )
Dkt
284) 5.)
Her
ounsel
at
the
time,
William
Fanciulloi
interpreted
the
absence
of
uch
a
notice
to
mean
hat
the
Government
viewed
Russell
as
a
mere
witness,
not
a
arget
or
a
ubject.^
(Reply
at
5.)
On
pril
30,2018,
anciullo
advised the
Government
hat
he
represented
Russell.
(May
10,2018
illiam
Fanciullo
Email
(Dkt.
284-2).)
Within
fifteen
minutes,
he
Government
offered to discuss Russell's
upcoming
appearance with
Fanciullo
(id), but
he
did
not
ollow
up
on
hat
ffer
and
did
not
communicate
with the
Government
bout
Russell's
status
in
the
investigation
before
she
estified
(Harris
Decl.
If
7).
n
May
0,2018,
ussell
estified
before
the
grand
ury.
(May
10,2018
Grand
ury Tr.
( Tr. ).)
Fanciullo
accompanied
her to
the
grand jury
chamber
nd
waited
outside
because
attorneys are
not
permitted
therein.
(Id
t 6:9-7:3.)
Russell
brought
a
iece
of
aper
into
the
target
of
n
nvestigation
is
a
person
as
to
whom
he prosecutor
or
the
grand
jury
has
substantial
evidence
linking
him
or
her
to
the
commission
of
rime and
who,
n the
judgment
of
he
prosecutor,
s
a
utative
defendant.
Justice
Manual
9-11.151.
A
subject
of
n
investigation
is
a
erson
whose
onduct
s
within
the
scope
of
he
grand
ury's
investigation.
Id.
It
s
the
DOJ's
olicy
to advise
a
rand ury
witness
of
heir
ights
if he
witness
is
a
arget
or
subject.
Id
If
someone
ppearing before
a
rand ury
is
neither
a
arget
nor
a
ubject,
hey
are
referred
to
as merely
a
witness.
(See,
.g..
Russell
Reply
n
Supp.
of ot.
Reply )
Dkt.
15)
t
5.)
^
The
Government
ever
expressly
indicated
whether
Russell
was a
ubject
of
he
investigation.
Case 1:18-cr-00204-NGG-VMS Document 528 Filed 04/12/19 Page 2 of 20 PageID #: 5561
chamber
with
language for her
to
use
when
she invoked
he
Fifth
Amendment.
fSee
Opp'n
at13.)
At
he
start
of
ussell's
testimony,
he
Government
dvised
her
that
she
was
not
eing
called
to the
grand jury
as
a
target
of
he
investigation,
which
the
Government
efined
as
a
person
to
whom
he prosecutor
or
the
grand jury has
substantial
evidence
linking
to
a
commission
of
rime
and
who,
n
the
judgment
of
he
prosecutor,
s
a
putative] defendant.
(Tr.
at
5:16-21.)
The
Government
lso
told
Russell
that
she
had
the
right
to
counsel
and
could
leave
the
chamber and
onsult Fanciullo before
answering
any
uestions.
Qd.
t 6:9-16.)
The
Government
id
not
say whether
Russell
was
a
subject
of
he
investigation.
Before
the
Government
dvised
Russell
as
to
her
Fifth
Amendment
ights,
Russell
invoked
the
Fifth
Amendment
n
response
to
two
of
he
irst
questions
asked
of
er,
which
were
about
whether whether
she
was
aying
for
Fanciullo's services
and whether she
had
recently
destroyed
any
xiym-related
documents.
Id.
at
7:5-8,21-24.)
Afterward,
he
Government
informed
Russell
that
she had a
ifth
Amendment
ight
to
not
say
anything
that
might
incriminate her;
that if
she
did
invoke
he
Fifth
Amendment,
t
must be
because
she
had
a
reasonable
fear
that
her
answer
o
the
question
asked
would
lead
to
her
prosecution;
and
that if
she
were
merely
a
itness
to
a
rime,
he
could
not invoke
the
Fifth
Amendment.
(See
d.
at
8:5-11,
:12-21.)
The
Government
lso
stated
that
Russell
had
been
sworn
o
tell
the
truth
and
could
be
harged with
perjury
if
she
did
not. (Id.
at
10:4-12.)
Following
his
advice
from
the
Government,
ussell
estified
for
about
an
hour-and-a-
half.
(Compare
d.
at
1:1,
with
id.
at
63:13-14.)
She
answered
the
Government's
questions
on
a
range
of
opics,
including:
her
experiences
with
Nxivm,
ncluding
the courses
she took and
her
positions within
Nxivm;
he
nature
and
philosophy
of
xivm
and
related
entities;
and
certain
Nxivm
ules,
ituals,
and
ranking systems.
(Id.;
s^
em
t
3.)
She
also
invoked
the
Fifth
Case 1:18-cr-00204-NGG-VMS Document 528 Filed 04/12/19 Page 3 of 20 PageID #: 5562